ADB to provide $44.76m for construction of solar power plant

KABUL (Pajhwok): Looking at expanding the use of renewable energy in Afghanistan, Finance Minister Eklil Hakimi on Sunday signed a grant agreement worth $44.76 million with the CEO of the Asian Development Bank Samuel Tumiwa for the construction of the first solar power plant.

“Afghanistan needs a source of sustainable energy. In this regard, the solar-powered energy offers promise in Afghanistan to meet the needs of the communities. Further, considering 300 sunny days per year with free solar irradiation to generate solar power, it makes Afghanistan an attractive country for implementing solar power projects,” said H.E EklilHakimi, the Minister of Finance.

“The demand for power is rapidly growing in all over Afghanistan and insufficient energy supplies severely constrain economic development and income opportunities in this country,” said Samuel Tumiwa, ADB Country Director for Afghanistan. “The new on-grid solar power generation project, which is the largest of its kind in Afghanistan, will not only provide access to a clean and reliable power supply in Afghanistan, but also create an environment for the future investments in this area through public-private partnerships.”

Although significant progress has been made since 2002to meet its domestic demand,Afghanistan has to largely rely on importing energy from the neighboring countries.

Presently, only about 32% of the population has access to grid-connected electricity and the electricity demand in major load centers is growing by 25% annually. Reliance on energy imports, lack of sufficient power generation capacity, a small domestic market, and financial weaknesses rendersAfghanistan’s energy security largely vulnerable.

The project will finance the construction of a 20 MW on-grid solar photovoltaic plant in Naghlu, located in the Surobi district of Kabul province. The project will partially but quickly fill the demand-supply gap, and improve the sustainability of the northeast grid covering the capital Kabul and Jalalabad province.

In addition to this, the project will provide power transformer and support facilities, upgrade the capacity of the existing sub-stations, and operation and maintenance (O&M) services for 3 years. The project will also prepare the site and the sub-station to accommodate additional PV plant of 10 MW for the future financing. The project also has the possibility of future expansion to 30 or 40 MW depending on the availability of additional financing from other development partners or the private sector.

Capacity building support will be also provided for thestaff of Ministry of Energy and Water (MEW), and government-owned energy utility Da Afghanistan BreshnaSherkat (DABS) on solar photovoltaic plant design, technical evaluation, grid integration, and operation and maintenance. The project will be in line with the National Energy Supply Program and the Afghanistan Renewable Energy Policyof the Government of Afghanistan.

The project will generate at least 65430 megawatt-hours of solar power and prevent at least 13,000 tons of carbon dioxide equivalents in the first full year of operation.

ADB is Afghanistan’s largest on-budget development partner in the energy sector and has helped delivering electricity to more than 5 million people in Afghanistan.

ADB will support in increasing the country’s electrification rate from current 30% to 83%, and in lifting the share of domestic power generation from 20% to 67% by 2030. ADB will also play a major role in power transmission both regionally and domestically, and in promoting clean energy, including through solar power.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 of which are from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in co-financing.

It is noteworthy which details of this contract shared with the media by the Ministry of Finance, Asian Development Bank and the Breshna Company.